Acquisitions strengthen GCC results

Published:
24 July 2008

Mexico-based Grupo Cementos de Chihuahua (GCC) announced consolidated results for the quarter ended June 30, 2008. During the second quarter of 2008 were generated double-digit volume growth in cement and concrete in the United States and Mexico compared to the first quarter of the year. These increases reflected more dynamic activity in the construction sector, the integration of acquisitions made in the first quarter of the year, and revenues generated by the new cement plan in Pueblo, Colorado. In addition, our operations in South America performed solidly.

Net sales in the second quarter of 2008 totaled $2,276.7 million pesos, a 0.8 per cent increase over the same period of last year. Higher sales in the United States and Bolivia more than offset the decline in Mexico. The effect on sales growth of the appreciation of the peso against the dollar was 5.6 per cent.In the United States, sales in dollar terms rose nine per cent compared to the second quarter of 2007 as a result of the integration of new acquisitions, the start-up of the cement plant in Pueblo, Colorado, and a better pricing environment. The US$300m new plant with be GCC’s most technologically advanced and be the most energy efficient one in the company. It will have a clinker capacity of 900,000t and employ about 95 people.Cement produced in Pueblo is expected to supply markets in New Mexico, Wyoming, and South Dakota. Due to a lower exchange rate in the second quarter of 2008 compared to the same period of 2007, sales in peso terms rose 3.4 per cent.

In Mexico, sales declined 6.6 per cent in the second quarter compared to the year ago period. This was the result of a combination of: a decrease in cement, concrete and block volumes due to less activity in low-income housing construction and state and municipal public infrastructure projects; an increase in sales of prefabricated products, other construction materials and land; and a better pricing environment.

GCC’s proportional sales in Bolivia rose 17.4 per cent in the second quarter of 2008 compared to the same period of last year as a result of greater demand in the housing and public infrastructure sectors. Cement and concrete volumes in Bolivia rose 24.8 per cent and 16.1 per cent, respectively.

Net sales in the first half of 2008 rose 4.3 per cent in dollar terms over the same period of last year.